When Can Workers Receive Final Pay After Resignation

Resigning from your job is never an easy decision to make because you will lose the stability your employment and salary provide. Apart from that, the uncertainties in the future make it an even more difficult to resign, especially if people are reliant on your income or you don’t have a new job lined up.


One question many ask is what will be included in the final payment of an employee who plans to resign. The labor laws here in the Philippines enunciate that it should include the salary for the work rendered, a pro-rated 13th-month pay, other bonuses, SIL or your unused incentive leaves (if there is any).


Where possible, it should include the return of the bond, and tax refund if there was any excess being withheld by the company. If you owe SSS loans and other amounts to your employer, it will be deducted and taken from your final pay. However, the release of the final pay may take time and it could get tricky under certain conditions. Learn more about this topic below, especially if you intend to resign or have employees on the verge of tendering in their resignation.

Some Workers are Not Entitled to Separation Pay

Bear in mind that if you plan to resign, you will not be entitled to separation pay. Some people are mistaken about payroll issues, especially when they think that separation pay should be given all the time. You must remember that separation pay will only be given to you if you have been removed from your job due to authorized causes such as redundancy, retrenchment, diseases, and the like.


You can also be entitled to separation pay if you have been illegally dismissed by your employer and you cannot be reinstated to your job because of strained relations. Again, separation pay is never given to employees who resign.

What DOLE Says About Receipt of Final Pay After Resignation

DOLE clarifies when employees should receive their final pay after the resignation. There were many interpretations and sources of confusion. There are some employers who would take their time in releasing their employee’s final pay while there were those employers who would subject their employees to a rigorous clearance system process before handing out the final pay.


On the 31st of January 2020, the Department of Labor and Employment, or DOLE finally issued Labor Advisory No. 06 series of 2020. DOLE mandated that the final pay should be released within thirty days from the date of termination or employment separation. This was mandated to keep the harmony between the management prerogative of the employer and the rights of the employee. This should be followed unless there is a more favorable policy or individual/collective agreement.

Computation of Your Final Pay and Filing of Disputes

So when should employers tender the final pay? Employees are always eager to receive this, especially if they have no succeeding work lined up. If you tendered your resignation on the 31st of August 2020, it will be effective on the 30th of September 2020. Remember that if you want to resign from your job, you need to notify your company of your plans to resign one month in advance. In this case, your company needs to give you your final pay on or before October. Of course, your company has the choice to give you your final pay at an earlier time.


If there is any dispute arising out of the issuance of your final pay, you should file your claim in the nearest DOLE field office. You should remember that it is always best to have things properly settled with your employer. When all your avenues did not work, going to the DOLE should always be your last resort.


As a business owner, you must stay on top of these issues to prevent meeting former employees in the labor courts. It would be a massive headache to be charged with neglecting to provide your former staff with their final payment. If you need assistance, call our accounting firm today. Apart form the usual accounting, bookkeeping, and auditing, we also provide payroll services to companies. Allow our team to facilitate payment issues on your behalf so you can mitigate risks and problems.